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In early March 2026, Japanese material giants Resonac and Mitsubishi Gas Chemical announced dramatic 30% price hikes for copper-clad laminates and related materials. Almost simultaneously, Chinese fiberglass leaders Guangyuan Advanced Materials and International Composites issued new round price increase notices. Behind these headlines lies an unexpected culprit: a humble piece of "cloth" that has become the most critical bottleneck in the global semiconductor supply chain.
At Shenzhen Kingsheng Tech Co., Ltd. , with over 22 years of PCB manufacturing experience serving clients in Australia, the United States, Italy, and across Europe, we are witnessing firsthand one of the most significant supply chain disruptions in our industry's history. Here's how a basic material became the linchpin holding the entire semiconductor industry hostage.
The "Cloth" That Holds Everything Together
The material in question is fiberglass fabric—the core reinforcement material in copper-clad laminates (CCL), which are the direct raw materials for manufacturing PCBs and IC packaging substrates.
Think of fiberglass fabric as the "skeleton" of every circuit board:
The Perfect Storm: Why This "Cloth" Became Critical
1. Extreme Supply Concentration
The root cause of today's crisis lies in an astonishing market reality: one Japanese company, Nittobo, controls approximately 90% of the global supply of high-end fiberglass fabric.
This isn't ordinary fabric. Production requires specialized electric furnaces operating at 1600-1700°C, with long, technically challenging processes from melting raw materials to spinning yarn to weaving. New production capacity takes years to build, leaving the market with almost noelasticity buffer when demand shifts.
2. AI Demand Explosion
The AI revolution has fundamentally changed demand patterns. According to industry data:
As Yole Group analyst Bilal Hachemi noted, "Replacing it is not easy"
The Ripple Effect: How shortage Spreads Through the Chain
Capacity Squeeze: The "Oven" Analogy
A useful way to understand this crisis comes from industry observers: Imagine工厂 only have so many "ovens". When these ovens are busy baking expensive "AI cakes" (high-end materials), there's no capacity left to bake "ordinary bread" (standard PCBs).
Guosen Securities analysis shows that producing one unit of high-end copper clad laminate consumes capacity equivalent to 4-5 units ofGeneral copper-clad laminate.
A PCB listed company's substrate person in charge revealed, "We expect fiberglass fabric to remain in tight supply throughout this year, with relief unlikely until the second half of 2027". Current substrate lead times have stretched to six months.
Price Increases Cascade
The price impact has been dramatic:
7628-type fiberglass fabric rose from RMB 4.15/meter in September 2025 to RMB 4.75/meter currently
Taiwanese fabric manufacturers raised prices over 50% in 2025, with monthly increases of 10-15% in 2026
Some forecasts suggest prices could double by year-end
CCL manufacturers have responded with multiple price hikes. Resonac announced a 30%+ increase effective March 1, 2026, followed by Mitsubishi Gas Chemical announcing 30% hikes across all electronic materials products effective April 1.
Industry analysts expect CCL (FR4), BT substrates, and ABF substrates to see price increases of 15-20% already implemented since Q4 2025, with another 10-20% expected in H1 2026.
Lead Times Explode
The supply crunch is visible in delivery schedules:
The Unprecedented: Nvidia Goes Direct to Material Suppliers
Perhaps the most telling sign of this crisis is the reaction from the industry's biggest player.
According to reports, Nvidia CEO Jensen Huang has personally visited Japan to meet with upstream suppliers to secure material allocations. This marks the first time a Terminal chip company has directly engaged with the most upstream material suppliers.
Yole Group's Hachemi commented, "This is the first time I've seen an end customer like Nvidia directly contact upstream material suppliers to secure capacity".
While this demonstrates the severity of the shortage, it also raises concerns about supply further centralization—if the largest player locks up most capacity, smaller chip companies and other applications face even greater pressure.
Beyond PCBs: Industry-Wide Impact
Semiconductor Manufacturing Bottlenecks
The fiberglass fabric shortage directly affects advanced packaging capacity. TSMC's CoWoS advanced packaging, critical for AI chip production, relies on ABF substrates made with high-end fiberglass fabric. The shortage limits CoWoS capacity release, creating a bottleneck in AI chip delivery.
Industry leader Unimicron stated clearly in February 2026 that due to strong AI customer demand, "the fiberglass fabric shortage will not be resolved in 2026," affecting virtually all AI clients.
Broad wave of semiconductor price hikes
Consumer Electronics Feel the Pain
The cost pressure is now reaching consumers. Omdia forecasts 12% decline in global PC shipments for 2026, driven primarily by drastically memory and storage price increases. PCs priced below $500 are expected to be hit hardest, with shipments declining approximately 28%.
Citi analysts previously warned that fiberglass fabric price increases would likely conduction to downstream, pushing up smartphone and notebook prices
The AI Connection: Why This Cycle Is Different
Industry analysts emphasize that this PCB cycle is fundamentally different from previous ones. Rather than gradual penetration of Terminal products, this cycle is driven by brand new requirement created by the AIcomputing power explosion.
Goldman Sachs analysis indicates the PCB industry is entering a "super cycle" driven by AI. Key projections:
Global AI server PCB market: 113% growth in 2026
Chinese Manufacturers Race to Catch Up
The supply crisis has accelerated domestic substitution efforts in China. As of August 2025, domestic manufacturers had achieved monthly production capacity exceeding 6 million meters of special fiberglass fabric.
Grace Fabric Technology, a leader in low-Dk fiberglass fabric, saw 2025 net profit surge 745-889% year-on-year, withnet profit excluding non-recurring gains and losses growth of 3377-3969%.
International Composites has achieved mass production of second-generation low-Dk fiberglass fabric, with full order book and capacity fully utilized.
However, significant technological gap remain between domestic producers and Nittobo in the highest-end segments, making complete substitution unlikely in the near term.
What This Means for Our Clients
For our partners in Australia, the United States, Italy, and across Europe, this supply environment demands new strategies:
With lead times stretching to 20+ weeks, reactive procurement no longer works. Early forecasting and committed orders are essential.
Understanding material availability and alternatives early in design can prevent production delays.
Partnership Is Critical
Working with experienced manufacturers who have established supply relationships becomes increasingly valuable in a capacity-constrained market.
Our Commitment: 22 Years of Experience, Ready for Challenge
At Shenzhen Kingsheng Tech, our 22 years in the PCB industry have prepared us for moments like this. We maintain:
While the current supply environment presents unprecedented challenges, our experience and partnerships position us to help clients navigate these turbulent times.
Looking Ahead
The 2026 PCB price surge represents more than just another supply disruption. It signals a fundamental shift in how the semiconductor industry operates—where a single, seemingly basic material can hold the entire chain hostage, and where AI demand rewrites market dynamics.
For manufacturers and buyers alike, the new reality demands longer planning horizons, stronger partnerships, and deeper technical understanding.
As one industry observer noted, this is the "asymmetric prosperity" of the AI era—where those positioned in the right segments thrive, while others face squeeze.
Ready to discuss how these industry dynamics affect your projects?
Contact Shenzhen Kingsheng Tech today to learn how our 22 years of experience can help you navigate today's challenging supply environment and build resilient supply chains for the future.
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